Ebro Foods: Net profit up to 105.6 million EUR

Madrid / ES. (epg) Spanish Ebro Foods obtained a net profit of 105.6 million EUR in the first nine months of 2014, up 6.1 percent year on year, while net profit on continuing operations rose 9.2 percent to 109.6 million EUR. Net turnover totalled 1’520.6 million EUR, up 4.4 percent on the same period of last year. The group Ebitda rose to 197.2 million EUR, two percent more than in the first nine months of 2013, while the Ebit, or net operating profit, stood at 153.5 million EUR. The company has reduced its debt by 66.3 million EUR over the past quarter, bringing it down to 364.2 million EUR by 30 September. By year-end, net debt is expected to stand at 434 million EUR, which would include the purchase of 52 percent of Garofalo plus the value of the remaining 48 percent, if the purchase option is exercised. This would give an estimated year-end net debt-Ebitda ratio of 1.5.

Core businesses

Rice: In the brand business, the division performed satisfactorily in all the geographical areas in which we operate, making good progress in the United States, with strong growth in the varieties with the highest value added, the United Kingdom and the Netherlands, accompanied by an upturn in our Moroccan subsidiary. From an industrial point of view, the severe drought prevailing in Texas since 2011 took its toll on the 2014/2015 crop and continues to affect business results in North America. Against this backdrop, the division managed a slight growth in turnover to 830.5 million EUR and its Ebitda rose to 104.4 million EUR.

Pasta: In a sector hard hit by the high durum wheat prices, which have risen by over 86 percent in Europe over the past year and, more specifically, by 67 percent since the arrival of the new crop in July, our company Panzani has performed well, with strong growth in volume thanks to relaunching of the classic ranges of product, the satisfactory progress of the strategic businesses of sauces and fresh products and the new communication strategy. However, in the United States the profits of our subsidiary New World Pasta (NWP) continue to be dragged down, not only by the hike in raw material prices, but also by:

  • The logistics problems caused by the congestion suffered by the North American railway system, which has led to higher transport costs and less efficient use of our industrial capacity.
  • And the added difficulty of passing these higher costs on in the final price of the product, owing to the high level of promotion in this category throughout the year.

As a result, the division posted a turnover of 726 million EUR and Ebitda of 99.2 million EUR.

Outlook for year-end 2014

Ebro expects to obtain a turnover of 2’126 million EUR for FY-2014, up 8.7 percent year on year. Ebitda should be of the order of 283 million EUR, more or less on a par with last year, while net profit is forecast at 148.4 million EUR, up twelve percent on 2013.

Sound management and business model

The consolidated results of this nine-month period and the estimates forecast for year-end illustrate, once again, the sound management and business model of our company, which is constantly adapted, redesigned and innovated to combat the effects of external factors such as the congestion of the US transport system, the adverse weather conditions or the rising prices of raw materials.

Market shares have been maintained and in certain business segments they have even increased. The company continues extending its field of action through inorganic growth, such as the purchase this year of 52 percent of the Italian premium pasta firm Garofalo, and enlargement of its product and country matrix, with numerous launchings such as the premium range of «Lustucru Frais» in France or the new «Brillante» cups of Brown Rice with Quinoa and Four Cereals in Spain.

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